Dr. Baier-Fuentes, Hugo

Given the importance of social capital in organizations, this research answers the question of how socioemotional wealth importance (SEWi), family human capital and family social capital influence organizational social capital in small family firms. Based on a sample of 334 small family businesses from the Biobío Region in Chile, a partial least squares structural equation modeling analysis (PLS-SEM) was performed. The results do not provide support for the predicted direct influence of family social capital on organizational social capital, but they support an indirect influence through SEWi and family human capital, both of which have a direct and positive influence on family firms’ organizational social capital. This means that SEWi and family human capital play a central role in generating organizational social capital in small family firms. It also suggests that both ability and willingness of family businesses play a role in allowing these firms to successfully transfer social capital from the family to the business system.

The case seeks to offer a tool to help students to integrate knowledge and develop analytical capabilities in the area of strategic management and internationalization of a family company. The case is developed for senior business students or MBA students, who should analyse if this family company should reconsider its strategy for entering the Chinese market. For that they can consult several articles that we recommend. Starting from the articles of Kuo, Kao, Chang and Chiu (2012) or Hollender, Zapkau and Schwens (2017), the students can argue for the Fariña-Roggendorf family the pros and cons of increasing family involvement and assigning responsibility to their son (or other family member) for developing their business in China vs insisting on strategic partners to support them in this enterprise. In the case that they decide develop their project themselves, the article by Li, He and Sousa (2017) sheds light for students to propose possible routes. In the case of suggesting the route of insisting with Chinese strategic partners, the article by De Massis, Frattini, Majocchi and Piscitello (2018) offers support for deciding between the option suggested by Isu Tsing vs the strategy implemented by the family up to now. This case study is designed for students to work in teams. The case is to be handed out a week before its reading. The teams should be made up beforehand and each team should bring a poster with the answers to the case questions.